Many of the financial decisions you make in your 20s will set the foundations to transiting from being dependent on your parents to becoming a financially independent working adult. Once you enter your 30s, you will likely find yourself having to shoulder more responsibilities and even having to care for dependents, such as your spouse, children or elderly parents.

In this stage of your life, many of the financial decisions you make will have a long-term impact on your life, including buying or upgrading your home, starting a family or scaling the corporate ladder. With that said, here are four important financial decisions you might need to consider in your 30s.

Before bringing your bundle of joy into this world, ideally you would plan your finances first.

In a world of uncertainties, maternity plans like AIA Mum2Baby Choices offer peace of mind for both mother and baby. Expectant mothers are covered against 10 pregnancy complications and death, as well as provided daily financial assistance in the event of hospitalisation due to pregnancy complications.

Babies are also protected from birth against 23 congenital illness and provided hospitalisation benefits for incubation, ICU/HDU and Hand, Foot and Mouth Disease for up to three years. Moreover, you are able to transfer the plan and applicable riders to your child within 60 days of birth.

#2 Saving For Your Children’s Education

Education is often seen as a stepping stone to achieving a good pay and living a comfortable life in Singapore. This is something many parents strive to provide for their children, often at the expense of their own financial security.

While your children’s university education may only be two decades away, you need to start saving up for this immediately. This is because tuition fees already range between $28,000 to $148,000 today, depending on the course taken. Of course, inflation will further increase the amount that we eventually have to spend when our children enter university.

Not many people have this kind of cash lying around so you need to plan in advance if you intend to pay for your child’s university education. The more time you have accumulating this money, the less stressful it will be.

Planning early for your children’s education is also important as you will have foresight into your ability to afford it. Knowing in advance whether you will have the full amount, or some shortfall, will allow you and your children to make alternative arrangements in order to afford their tertiary education.

AIA Wealth Pro Advantage is an example of a policy that helps you start accumulating funds for your children’s education from the moment they are born. Your contributions to the policy will be portioned into both savings and investing to offer stable growth over time, with a potential for enhanced returns from your investments.

You can choose to make a partial withdrawal when you need it, such as for your child’s university education, while leaving the rest of the funds to continue compounding for your child’s education.

#3 Start Planning For Retirement

Before you start thinking for your child, you need to ensure your financial future is secured when you eventually retire. Again, the longer you have to accumulate your retirement nest egg, the less stressful it will be.

Unlike planning for your child’s education where you may have other financing options, you cannot afford to have a shortfall for your retirement. A shortfall will mean you are either dependent on your children, or forced to continue working in your old age in order to afford your daily living expenses.

While it’s easy to assume you simply need to work longer if required, the reality is that people fall ill, get injured or become redundant in their occupation. It’s also not a guarantee that you will be able to continue earning the same salary when you get older.

This uncertainty makes it important to start planning for your retirement as early as possible. The government has taken an active role in preparing Singaporeans for retirement via CPF and the CPF LIFE scheme, the Supplementary Retirement Scheme (SRS), the lease buyback scheme, and several others.

While these options are available for all Singaporeans, you cannot assume that they will be sufficient for your retirement. You need to crunch the figures for yourself to know how much you need and ensure you have a plan that gets you there.

You can also take advantage of retirement products that give you guaranteed monthly payouts to supplement your retirement income. Other ways to grow your retirement nest egg include investing in properties, stocks or bonds.

#4 Closing Your Insurance Protection Coverage Gaps

With a spouse, young children, ageing parents, and heavier financial obligations, you need to ensure that you cover your insurance protection gaps once you get into your 30s. There are two main types of insurance protection gaps to consider – mortality protection gap and critical illness protection gap.

Your mortality protection gap is the difference between your combined insurance coverage and savings compared to the amount that your dependents will need if you are no longer around to provide for them.

Your critical illness protection gap is the difference between your insurance coverage compared to the amount that you and your dependents need if you fall critically ill, usually calculated over a five-year recovery period.

In both scenarios, your financial obligations will be passed on to your family members. If you or your family require more money than what your insurance coverage would pay out and your remaining savings, you have an insurance protection gap that you need to close.

The importance of closing your insurance protection gap is to ensure your dependents’ financial stability when you are no longer able to provide for them. The goal is to allow them to continue a similar standard of living in your absence.

Put In Place Plans For Your Long-Term Future

In your 30s, you encounter some of the biggest transitions in your life. You start taking on more financial obligations, such as moving into a bigger home or buying a car, you start having dependents, in the form of your kids and your ageing parents who may lean on you for support, and you start charting a path for your long-term career aspirations.

As this happens, you need to ensure you plan your finances wisely in order to secure your family’s long-term financial needs, as well as close new insurance protection gaps at every step along the way.